Table of Contents Hide
- What is a Box Truck Business?
- How to Start a Truck Box Business: A Step-by-Step Guide
- Step #1. Create a business plan.
- Step #2: Formalize your business legally.
- Step #3: Obtain the required business licenses and permits.
- Step #4: Purchase or lease the necessary equipment.
- Step #5: Choose the appropriate insurance coverage.
- Step #6: Recognize and track your income and expenses.
- Step #7: Find new customers and expand your business.
- Step #8: Maintain compliance
- How Much Money Do Owners of Box truck Make?
- How Much Does It Cost To Start A Box Truck Business?
Trucking is a profitable sector, but it is also a difficult way to generate money.
As a result, numerous businesses have specialized in box trucking in order to find easier ways to make money in this business.
That’s a wise decision given that box trucks are the most in-demand commercial vehicles in local markets. Making money with a box truck is simple if you understand what a straight truck is, grasp the ins and outs of operating a box truck firm, and have a sound business plan. To create your box truck start-up business, follow the step by step guide outlined below.
What is a Box Truck Business?
Before we can answer this question, we must first define a box truck.
A box truck (also known as a straight truck, box van, or cube van) is a chassis cab truck with a rectangular cargo space that is enclosed. They are typically 10–26 feet long and can be classified as Class 3–7. (12,500 lb. to 33,000 lb. gross vehicle weight rating). They frequently have a roll-up door in the back that provides access to the cargo space. You’ve driven a box truck if you’ve ever hired a U-Haul.
A box truck business is one in which you are compensated to deliver loads in your box truck. Most of the time, the freight you deliver is in the “less than truckload” (LTL) sector, which has been expanding with the growth of e-commerce. Packages, furniture, big food products, and other cargo that require local delivery can all be delivered in this manner. Box trucks are ideal since they are intended to negotiate urban areas while also having adequate storage space to transport rather large items.
One of the most appealing aspects of having a box truck business is that you may operate one without a commercial driver’s license if you choose the correct model of box truck (CDL). More on that in a moment.
Now that we’ve covered the basics, let’s go into the step by step guide of how you can start your own box truck business.
How to Start a Truck Box Business: A Step-by-Step Guide
To create your box truck start-up business, follow the step by step guide outlined below.
Step #1. Create a business plan.
You’ll want to start your new box truck business firm with an organized plan, just like you would a new job with a fresh viewpoint and set of goals. A business plan serves as a road map to success and can be modified as your business expands. It assists you in getting organized, identifying goals, articulating your value offer, and identifying potential roadblocks.
Step #2: Formalize your business legally.
Operating your trucking firm as a properly constituted corporation or Limited Liability Company (LLC) separates your personal assets from your business responsibilities. Aside from preserving your personal property as a business owner, incorporating provides various legal, tax, and business benefits. Use our Business Startup Wizard to choose the best structure for your new trucking firm.
When forming a corporation or LLC, you must complete the following steps:
1. Select a registered agent.
A registered agent is the state’s method of connecting with a business entity, and it is needed by law in the majority of states. As the secretary of state’s official point of contact, the registered agent must be present at a physical location (not a P.O. Box) during defined business hours to sign for and receive legal notices, state mandates, wage garnishments, and tax paperwork. It is vital for registered agents to be reachable at all times. A missed delivery could threaten your company’s good standing with the state or allow a lawsuit against you to proceed without your knowledge.
2. Obtain your EIN to obtain an account.
Your employer identification number EIN, functions similarly to a social security number for your business. This nine-digit number is essential to opening a business bank account and must appear on all tax filings for the duration of your business’s existence.
Step #3: Obtain the required business licenses and permits.
Before opening their doors, most state, county, and local governments require businesses to have the necessary licenses and permissions in place. There are over 150,000 filing jurisdictions in the United States, each with its own set of rules. Any number of licenses and permissions may apply to your trucking firm, depending on your service and business.
Every owner-operator should consider whether the following items are necessary for running a successful trucking company:
- A commercial driver’s license (CDL) and any applicable endorsements are required. A commercial driver’s license (CDL) is required by federal law for drivers of commercial motor vehicles. For further information, contact your state’s licensing department.
- A USDOT number: When conducting inspections, audits, and investigations, the Federal Motor Carrier Safety Administration (FMCSA) uses a trucking firm’s unique USDOT number to identify the company.
- A Motor Carrier Operating Authority (MC number): Depending on your business operations, you may require more than one MC number for your trucking business.
- A BOC-3 filing: Every motor carrier, broker, and freight forwarder must choose a process agent to submit Form BOC-3, or blanket of coverage, on their behalf with the Federal Motor Carrier Safety Administration (FMCSA). There can only be one completed form on file, and it must include all states where agency designations are required. The carrier or broker must keep one copy at its principal place of business. Our CSC team can handle your BOC-3 filing because we are a process agent in all 50 states (s).
- Credentials for the International Registration Plan (IRP) and an International Fuel Tax Agreement (IFTA) decal: Trucking firms that provide services in or across numerous states must obtain IRP credentials and IFTA decals for their vehicles.
Step #4: Purchase or lease the necessary equipment.
The right tools might mean the difference between success and failure. Consider the following items when choosing trucking equipment for your business:
- Is the vehicle capable of meeting the needs of your cargo? For example, if you are transporting perishable things, you should think about using a refrigerated compartment.
- Is it better to buy or lease equipment for your new business?
This is a good opportunity to do more research and make use of your network connections. Speak with seasoned truck drivers who have made the shift to owner-operator and compare possibilities before making a purchase choice.
Step #5: Choose the appropriate insurance coverage.
You will need to purchase business insurance for your new trucking firm as an owner-operator. Before deciding on a policy, the most effective way to acquire the greatest premium is to contact numerous agents and explore the following possibilities.
- First-party liability insurance
- Insurance for cargo
- Insurance for physical damage
- Accident coverage for passengers
Step #6: Recognize and track your income and expenses.
Creating a system to manage income and expenses is a critical component of running a successful business. This is especially significant for transportation firms in terms of logistics, because payments are frequently received weeks or months after delivery, and it might be difficult to trace spending while on the road.
Keep the following best practices in mind to assist prevent frequent starting stumbling blocks:
- Hire an accountant or subscribe to bookkeeping software. Even when you’re not at home, online accounting software like Xero can help you keep track of your revenue and expenses. They can also assist you in locating an accountant or bookkeeper to assist you in staying on track.
- Determine when and how you will be compensated for delivery. Shipping contracts frequently stipulate that payment is due 30 to 90 days following delivery. Such delays are manageable, but only if you are aware of them in advance.
- Keep detailed records of all business spending. Keep a file of invoices, receipts, and check stubs in case you need to justify your expenses.
- Separate your personal and business finances. Separate bank accounts should be kept for business and personal use.
Step #7: Find new customers and expand your business.
You’ll need to obtain freight to haul when you first start a box truck business. Using load boards to find customers is one possibility for new freight companies.
Another alternative is to start establishing contacts with potential clients through marketing and networking. Make direct contact with local shippers and meet new customers where they do business. Relevant small business trade events or industry groups, as well as the DAT Load Board for Truckers, which is available for download on Android and Apple operating systems, are useful places to start.
Step #8: Maintain compliance
Owning and maintaining a business entails staying on top of time-sensitive filing requirements, which range from IFTA’s quarterly tax reports to multi-year CDL renewals. Failure to meet these standards may result in the loss of good standing or substantial penalties. This includes adhering to your state’s corporate reporting standards. Failure to do so may result in the revocation of your corporation’s or LLC’s existence by the state.
How Much Money Do Owners of Box truck Make?
According to Ziprecruiter, the national average salary for a box truck owner-operator is $110,275 per year, or roughly $53 per hour. However, the range might be as low as $23,500 and as high as $293,000! How much you earn depends on a variety of factors, including the number of loads you transport, how well you manage your expenses, and where you operate.
Sunnyvale, CA, Santa Cruz, VA, Santa Rosa, CA, Williston, ND, and Manhattan, NY, for example, are among the cities with the highest annual pay.
How Much Does It Cost To Start A Box Truck Business?
To start up a box truck business might be costly, but it does not have to be.
The most expensive item will be the cost of your truck. When purchasing a new box truck, you may expect to pay between $25,000 and $45,000 for a light duty class 2 or 3 truck, but the larger the truck, the more you will have to pay.
The table below breaks down the price of a new box truck by size.
|Box Truck Size||Box Truck Price Range|
|Light duty classes 2 and 3||$25,000-$45,000|
|Medium duty class 4||$35,000-$50,000|
|Medium duty class 5||$45,000-$70,000|
|Medium duty class 6||$50,000-$90,000|
If you insist on buying your own truck, you can get a great deal on a secondhand one. A old box truck with 200,000 kilometers can be had for as little as $5,000 – $10,000. Newer, lower-mileage trucks will, of course, cost more, with prices ranging from $10,000 to $40,000 depending on age, mileage, and condition.
Read Also: PERCENTAGE LEASE: Guide To Leases in Commercial Real Estate
You can also finance the purchase of your truck, which will significantly reduce your initial outlay.
If you are not committed to purchasing a truck, you can rent or lease one. If you don’t have a lot of money to put down and don’t want to be tied down to a long-term commitment, renting a box truck is a wonderful choice. Another advantage of renting is that you rarely have to bother about maintenance. However, these advantages come at a cost.
Not only will you most likely be required to leave a substantial deposit with the rental firm, but you will also be charged a fixed rate plus mileage. These rental fees can pile up and are likely to be significantly greater than long-term lease rates.
If you don’t want to spend large upfront expenditures, another option is to lease your box truck. According to Trust Capital USA, a start-up business should expect to pay roughly $1,000 per month.
Of course, purchasing a truck isn’t the only expense associated with a box truck business start up (although it is likely to be your biggest cost). You’ll also need to budget for equipment (such as a pallet jack, straps, and load bars), licenses, permits, insurance, marketing, load board fees, and so on.
When first starting out, you might wish to start through the load boards to see what kinds of loads are available. If you see a lot of wonderful loads that you can transport, then buying isn’t a bad idea; however, if you don’t see a lot of opportunities right immediately, you might want to consider renting instead of owning your truck so you don’t have a truck sitting there.